How to calculate seasonal index

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How to calculate seasonal index

• Pick time period (number of years)
• Pick season period (month, quarter)
• Calculate average price for season
• Calculate average price over time
• Divide season average by over time average price
  x 100

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Sioux Falls Cull Cow Prices Sioux Falls Cull Cow Prices Sioux Falls Cull Cow Prices Sioux Falls Cull Cow Prices
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
2000 41.70 41.19 42.38 46.40 48.25 47.63 47.50 43.50 41.70 38.18 39.00 41.55 43.25
2001 41.56 43.75 45.15 46.25 47.75 49.20 47.63 47.38 45.45 42.87 37.50 38.37 44.41
2002 39.10 41.88 44.06 42.88 42.45 41.50 37.67 37.50 37.88 35.80 35.38 35.83 39.33
2003 39.20 40.25 42.50 45.13 47.75 46.06 49.96 49.13 50.50 48.85 51.83 49.67 46.74
2004 47.10 46.00 49.88 53.40 56.38 60.00 59.50 59.75 58.00 54.75 55.50 52.50 54.40
2005 54.25 55.25 60.30 61.25 62.75 61.50 58.25 54.90 55.63 52.75 50.90 52.13 56.66
2006 47.13 49.75 49.80 47.63 47.80 47.94 47.75 49.85 50.25 48.31 43.06 41.50 47.56
2007 48.50 52.63 52.00 52.13 55.50 54.25 54.08 55.25 52.88 53.20 46.25 48.75 52.12
2008 50.00 55.94 55.69 54.40 59.38 58.13 63.35 63.00 59.00 53.60 44.75 41.75 54.92
2009 45.63 46.75 46.88 49.33 53.17 45.88 48.63 47.06 46.90 44.94 43.08 45.83 47.01

Average 45.42 47.34 48.86 49.88 52.12 51.21 51.43 50.73 49.82 47.33 44.73 44.79 48.64
Mon/Yr 93 97 100 103 107 105 106 104 102 97 92 92 100
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Using Seasonal Index to Forecast

• Observe price in time t1 P1
• Forecast price in time t2 P2
• Start with P1/ I1 P2 / I2
• Then P1 x I2 / I1 P2
• Assume that cows are selling at 50/cwt in
  November. What is the forecast of February?